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Wednesday, May 9, 2012

Spring 2012 Journal of Economic Perspectives

The Spring 2012 issue of my own Journal of Economic Perspectives is now freely available on-line, along with earlier issues back to 1994, courtesy of the American Economic Association. It's the 100th issue, and thus a bit of a landmark for the journal and for me personally, because I've been the Managing Editor since the journal began. I'll blog about some of the individual papers in the next week or so. Here, I'll just provide the "Table of Contents" at the top, abstracts below, and links to the papers.

The Journal of Economic Perspectives at 100 (Issues)
David Autor
When
I was a graduate student, I discovered that the Journal of Economic
Perspectives embodied much of what I love about the field of economics:
the clarity that pierces rhetoric to seek the core of a question; the
rigor to identify the causal relationships, tradeoffs, and
indeterminancies inherent in a problem; the self-assurance to apply the
disciplinary toolkit to problems both sacred and profane; and the force
of logic to reach conclusions that might be unexpected, controversial,
or refreshingly bland. It never occurred to me in those years that one
day I would edit the journal. While doing so is a privilege and a
pleasure, I equally confess that it's no small weight to be the
custodial parent of one of our profession's most beloved offspring. No
less intimidating is the task of stipulating what this upstart youth has
accomplished in its first 25 years and 100 issues in print. Like any
empiricist, I recognize that the counterfactual world that would exist
without the JEP is unknowable, but my strong hunch is that our
profession would be worse off in that counterfactual world. In this
essay, I reflect on the journal's accomplishments and articulate some of
my own goals for the JEP going forward.
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Supplementary Materials

The Journal of Economic Perspectives and the Marketplace of Ideas: A View from the Founding
Joseph E. Stiglitz
I welcome the opportunity to join in the celebration of the twenty-fifth birthday of the Journal of Economic Perspectives.
It is wonderful to see how this "baby," which I, along with Carl
Shapiro and Timothy Taylor, nurtured through its formative years—from
1984 (three years before the first issue in 1987) until I left in
1993—has grown up and become an established part of the economics
profession. In founding the journal, we had many objectives, hopes, and
ambitions. We were concerned about the increasing specialization within
the economics profession. We sought to have complex and sometimes arcane
or highly mathematical ideas translated into plain English, or at least
that dialect of the language known as "Economese"—and in a way that was
not only informative but engaging. We were worried too about a growing
distance between economics and policy. At least a portion of economic
research should be related to ideas that were, or should or would be,
part of the national and global policy debates. We began with an
explicit commitment to present a diversity of viewpoints, hence the word
"perspectives" in the title. One of the goals we set out for ourselves
was to disseminate developments within economics more rapidly. We never
shied away from controversy at the journal, but we tried to ensure that
the discussion was balanced.Full-Text Access |
Supplementary Materials

From the Desk of the Managing Editor
Timothy Taylor
Editing
isn't "teaching" and it isn't "research," so in the holy trinity of
academic responsibilities it is apparently bunched with faculty
committees, student advising, and talks to the local Kiwanis club as
part of "service." Yet for many economists, editing seems to loom larger
in their professional lives. After all, EconLit indexes more than 750
academic journals of economics, which require an ever-shifting group of
editors, co-editors, and advisory boards to function. Roughly one-third
of the books in the annotated listings at the back of each issue of the
Journal of Economic Literature are edited volumes. Here is one take on
the enterprise of editing from someone who has been sitting in the
Managing Editor's chair for all 100 issues of the Journal of Economic Perspectives since before the first issue of the journal mailed in Summer 1987.
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The Rise of Middle Kingdoms: Emerging Economies in Global Trade
Gordon H. Hanson
In
this paper, I examine changes in international trade associated with
the integration of low- and middle-income countries into the global
economy. Led by China and India, the share of developing economies in
global exports more than doubled between 1994 and 2008. One feature of
new trade patterns is greater South-South trade. China and India have
booming demand for imported raw materials, which they use to build
cities and factories. Industrialization throughout the South has
deepened global production networks, contributing to greater trade in
intermediate inputs. A second feature of new trade patterns is the
return of comparative advantage as a driver of global commerce. Growth
in low- and middle-income nations makes specialization according to
comparative advantage more important for the global composition of
trade, as North-South and South-South commerce overtakes North-North
flows. China's export specialization evolves rapidly over time,
revealing a capacity to speed up product ladders. Most developing
countries hyper-specialize in a handful of export products. The
emergence of low- and middle-income countries in trade reveals
significant gaps in knowledge about the deep empirical determinants of
export specialization, the dynamics of specialization patterns, and why
South-South and North-North trade differ.
Full-Text Access |
Supplementary Materials

Putting Ricardo to Work
Jonathan Eaton and Samuel Kortum
David
Ricardo (1817) provided a mathematical example showing that countries
could gain from trade by exploiting innate differences in their ability
to make different goods. In the basic Ricardian example, two countries
do better by specializing in different goods and exchanging them for
each other, even when one country is better at making both. This example
typically gets presented in the first or second chapter of a text on
international trade, and sometimes appears even in a principles text.
But having served its pedagogical purpose, the model is rarely heard
from again. The Ricardian model became something like a family heirloom,
brought down from the attic to show a new generation of students, and
then put back. Nearly two centuries later, however, the Ricardian
framework has experienced a revival. Much work in international trade
during the last decade has returned to the assumption that countries
gain from trade because they have access to different technologies.
These technologies may be generally available to producers in a country,
as in the Ricardian model of trade, our topic here, or exclusive to
individual firms. This line of thought has brought Ricardo's theory of
comparative advantage back to center stage. Our goal is to make this new
old trade theory accessible and to put it to work on some current
issues in the international economy.
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Supplementary Materials

Gains from Trade When Firms Matter
Marc J. Melitz and Daniel Trefler
The
rising prominence of intra-industry trade and huge multinationals has
transformed the way economists think about the gains from trade. In the
past, we focused on gains that stemmed either from endowment differences
(wheat for iron ore) or inter-industry comparative advantage (David
Ricardo's classic example of cloth for port). Today, we focus on three
sources of gains from trade: 1) love-of-variety gains associated with
intra-industry trade; 2) allocative efficiency gains associated with
shifting labor and capital out of small, less-productive firms and into
large, more-productive firms; and 3) productive efficiency gains
associated with trade-induced innovation. This paper reviews these three
sources of gains from trade both theoretically and empirically. Our
empirical evidence will be centered on the experience of Canada
following its closer economic integration in 1989 with the United
States—the largest example of bilateral intra-industry trade in the
world—but we will also describe evidence for other countries.Full-Text Access |
Supplementary Materials

Globalization and U.S. Wages: Modifying Classic Theory to Explain Recent Facts
Jonathan Haskel, Robert Z. Lawrence, Edward E. Leamer and Matthew J. Slaughter
This
paper seeks to review how globalization might explain the recent trends
in real and relative wages in the United States. We begin with an
overview of what is new during the last 10-15 years in globalization,
productivity, and patterns of U.S. earnings. To preview our results, we
then work through four main findings: First, there is only mixed
evidence that trade in goods, intermediates, and services has been
raising inequality between more- and less-skilled workers. Second, it is
more possible, although far from proven, that globalization has been
boosting the real and relative earnings of superstars. The usual
trade-in-goods mechanisms probably have not done this. But other
globalization channels—such as the combination of greater tradability of
services and larger market sizes abroad—may be playing an important
role. Third, seeing this possible role requires expanding standard
Heckscher-Ohlin trade models, partly by adding insights of more recent
research with heterogeneous firms and workers. Finally, our expanded
trade framework offers new insights on the sobering fact of pervasive
real-income declines for the large majority of Americans in the past
decade.
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Supplementary Materials

Why Is the Teen Birth Rate in the United States So High and Why Does It Matter?
Melissa S. Kearney and Phillip B. Levine
Why
is the rate of teen childbearing is so unusually high in the United
States as a whole, and in some U.S. states in particular? U.S. teens are
two and a half times as likely to give birth as compared to teens in
Canada, around four times as likely as teens in Germany or Norway, and
almost ten times as likely as teens in Switzerland. A teenage girl in
Mississippi is four times more likely to give birth than a teenage girl
in New Hampshire—and 15 times more likely to give birth as a teen
compared to a teenage girl in Switzerland. We examine teen birth rates
alongside pregnancy, abortion, and "shotgun" marriage rates as well as
the antecedent behaviors of sexual activity and contraceptive use. We
demonstrate that variation in income inequality across U.S. states and
developed countries can explain a sizable share of the geographic
variation in teen childbearing. Our reading of the totality of evidence
leads us to conclude that being on a low economic trajectory in life
leads many teenage girls to have children while they are young and
unmarried. Teen childbearing is explained by the low economic trajectory
but is not an additional cause of later difficulties in life.
Surprisingly, teen birth itself does not appear to have much direct
economic consequence. Our view is that teen childbearing is so high in
the United States because of underlying social and economic problems. It
reflects a decision among a set of girls to "drop-out" of the economic
mainstream; they choose nonmarital motherhood at a young age instead of
investing in their own economic progress because they feel they have
little chance of advancement.Full-Text Access |
Supplementary Materials

Why Was the Arab World Poised for Revolution? Schooling, Economic Opportunities, and the Arab Spring
Filipe R. Campante and Davin Chor
What
underlying long-term conditions set the stage for the Arab Spring? In
recent decades, the Arab region has been characterized by an expansion
in schooling coupled with weak labor market conditions. This pattern is
especially pronounced in those countries that saw significant upheaval
during the first year of the Arab Spring uprisings. We argue that the
lack of adequate economic opportunities for an increasingly educated
populace can help us understand episodes of regime instability such as
the Arab Spring.Full-Text Access |
Supplementary Materials

Using Internet Data for Economic Research
Benjamin Edelman
The
data used by economists can be broadly divided into two categories.
First, structured datasets arise when a government agency, trade
association, or company can justify the expense of assembling records.
The Internet has transformed how economists interact with these datasets
by lowering the cost of storing, updating, distributing, finding, and
retrieving this information. Second, some economic researchers
affirmatively collect data of interest. For researcher-collected data,
the Internet opens exceptional possibilities both by increasing the
amount of information available for researchers to gather and by
lowering researchers' costs of collecting information. In this paper, I
explore the Internet's new datasets, present methods for harnessing
their wealth, and survey a sampling of the research questions these data
help to answer. The first section of this paper discusses "scraping"
the Internet for data—that is, collecting data on prices, quantities,
and key characteristics that are already available on websites but not
yet organized in a form useful for economic research. A second part of
the paper considers online experiments, including experiments that the
economic researcher observes but does not control (for example, when
Amazon or eBay alters site design or bidding rules); and experiments in
which a researcher participates in design, including those conducted in
partnership with a company or website, and online versions of laboratory
experiments. Finally, I discuss certain limits to this type of data
collection, including both "terms of use" restrictions on websites and
concerns about privacy and confidentiality.Full-Text Access |
Supplementary Materials

Jonathan Levin: 2011 John Bates Clark Medalist
Liran Einav and Steve Tadelis
Jonathan
Levin, the 2011 recipient of the American Economic Association's John
Bates Clark Medal, has established himself as a leader in the fields of
industrial organization and microeconomic theory. Jon has made important
contributions in many areas: the economics of contracts and
organizations; market design; markets with asymmetric information; and
estimation methods for dynamic games. Jon's combination of breadth and
depth is remarkable, ranging from important papers in very distinct
areas such as economic theory and econometric methods to applied work
that seamlessly integrates theory with data. In what follows, we will
attempt to do justice not only to Jon's academic work, but also try to
sketch a broader portrait of Jon's other contributions to economics as a
gifted teacher, dedicated advisor, and selfless provider of public
goods.Full-Text Access |
Supplementary Materials

Retrospectives: The Introduction of the Cobb-Douglas Regression
Jeff Biddle
At
the 1927 meetings of the American Economic Association, Paul Douglas
presented a paper entitled "A Theory of Production," which he had
coauthored with Charles Cobb. The paper proposed the now familiar
Cobb-Douglas function as a mathematical representation of the
relationship between capital, labor, and output. The paper's innovation,
however, was not the function itself, which had originally been
proposed by Knut Wicksell, but the use of the function as the basis of a
statistical procedure for estimating the relationship between inputs
and output. The paper's least squares regression of the log of the
output-to-capital ratio in manufacturing on the log of the
labor-to-capital ratio—the first Cobb-Douglas regression—was a
realization of Douglas's innovative vision that a stable relationship
between empirical measures of inputs and outputs could be discovered
through statistical analysis, and that this stable relationship could
cast light on important questions of economic theory and policy. This
essay provides an account of the introduction of the Cobb-Douglas
regression: its roots in Douglas's own work and in trends in economics
in the 1920s, its initial application to time series data in the 1927
paper and Douglas's 1934 book The Theory of Wages, and the early
reactions of economists to this new empirical tool.
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